Agenda Packets - 1997/04/28 - Laserfiche WebLink

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ibus tax Bill April 20. 1997 Page 53 NFORMATflJ Y• f PsP. . +J. •' I • 5 Small city. Defines a small city for purposes of the taxirictement act as a city with a population of 5,000 or less that is located more than 10 miles from a city with a population of 10,000 or more. Effective date: Requests for certification after June 1, 1997 6 Blight criteria records. Restates and clarifies that written records must be kept of how the blight criteria for redevelopment and renewal and renovation districts were met Effective date: Requests for certification after June 1, 1997 7 But-for test,spending in existing districts. Extends the but-for test to new spending authorized from existing districts. The but-for test requires the municipality(usually a city)to find that the proposed development or another equally valuable development would not occur without using tax increment financing. Under present law,the but-for test applies only when a new tax increment financing district is created. This section extends the but-for test to authorizations of new spending(by,e.g.,amending the TT plan, a development plan,or changing budgets) for an existing district,if it is estimated that the changes will permit$50,000 or more of increments to be spent. Qualified housing developments are not subject to this requirements. Spending that is made S under a previous binding commitment and spending of bond proceeds is not subject to this requirement. Effective date: Spending of increments finally approved after June 1, 1997 8 Pay-as-you-go financing rules. Imposes rules on districts where improvements and spending are financed internally by the developer and the authority reimburses the developer for its costs. This rules will require these"pay-as-you-go"agreements to be in writing. In addition, the developer may be reimbursed only after submitting written evidence that it has paid costs that qualify for reimbursement with tax increments. Finally, interest paid to the developer are Iimited to a reasonable rate,based on the authority's cost of borrowing. Effective date: Agreements entered into after June 1, 1997 9 Soils districts duration limit. Increases the duration limit for soils condition districts from 12 years after certification to 20 years after the receipt of the first increment. Effective date: Requests for certification after June 1, 1997 10 Unspent increments on decertification. Clarifies that unspent or unencumbered increments when a district is decertified must be returned to the city,county, and school district as excess increments. This does not apply to the portion of increments that may be "pooled"or spent outside of the district for post-1988 districts. Unencumbered increments are defined as increments that have not be designated for payment of already provided goods • and services or specific amounts under binding contracts. Research Department Minnesota House of Representatives Boo State Office Building 'd S3I LID NW JO 3-19ti37 WdT2:20 L6 T2 2idd